A Service Level Agreement is the service contract component between a service provider and customer. A Service Level Agreement provides specific and measurable aspects related to service offerings. For example, Service Level Agreements are often included in signed agreements between Internet service providers (ISP) and customers.
Service Level Agreement is also known as an Operating Level Agreement when used in an organization without an established or formal provider-customer relationship.
Adopted in the late 1980s, Service Level Agreements are currently used by most industries and markets. By nature, Service Level Agreements define service output but defer methodology to the service provider's discretion. Specific metrics vary by industry and Service Level Agreement purpose.
1) Specific details and scope of provided services, including priorities, responsibilities and guarantees
2) Specific, expected and measurable services at minimum or target levels
3) Informal or legally binding
4) Descriptive tracking and reporting guidelines
5) Detailed problem management procedures
6) Detailed fees and expenses
7) Customer duties and responsibilities
8) Disaster recovery procedures
9) Agreement termination clauses
In outsourcing, a customer transfers partial business responsibilities to an external service provider. The Service Level Agreement serves as an efficient contracting tool for current and continuous provider-customer work phases.